Labour’s ‘Great betrayal’ led to the brink of collapse

In the first part of our new series on past crises in the Labour Party Matthew Cookson looks at the party’s response to the 1930s

Published Tue 27 May 2008

Issue No. 2103

Ramsay MacDonald

The Labour Party is currently facing a deep crisis. This is not the first time it has faced such turmoil in its 100 years of history.

Each crisis has shown Labour’s commitment to maintaining the stability of capitalism at the expense of ordinary people.

Labour faced one of its greatest disasters in the 1930s. It took office in the 1929 general election. The Wall Street crash of October 1929 followed.

The Great Depression battered every country and Britain was not immune, despite being cushioned by the booty of empire. Unemployment stood at 1.3 million in May 1929. By August 1931 it had risen to 2.7 million.

This hit government finances. Prime minister Ramsay MacDonald proposed a 10 percent cut in unemployment benefit at the behest of British and US bankers.

The majority of the cabinet voted to accept this. But because the bankers had demanded total obedience, this was not enough for MacDonald. He dissolved the Labour government and made an alliance with the Tories.

His national government comprehensively won the general election in October 1931. Labour suffered a catastrophic fall in its vote – winning just 6.6 million votes compared to 8.4 million in 1929. It now had only 46 seats in parliament, compared to 289 in 1929.

MacDonald’s betrayal and the impotency of Labour in the face of the banks meant that even the most right wing members of the Labour Party began to question the possibility of reforming the system.

Many realised that the capitalists would not sit idly by while a government reduced their power. This produced left wing rhetoric from even solid members of the Labour right.

One of these was R H Tawney. He said, “Onions can be eaten leaf by leaf, but you cannot skin a live tiger paw by paw – vivisection is its trade and it does the skinning first.”

But the radical speeches did not produce any action.

The defeat also produced other reactions.

The Independent Labour Party, one of the bastions of the party’s left wing, voted to leave Labour.

The collapse of the 1929-31 government had its biggest impact on Sir Stafford Cripps. Previously a Labour right winger, he shifted massively to the left.

He helped to found the Socialist League in 1932 to push for radical policies in the Labour Party. The League had an enormous impact in the party in the next two years as the leadership remained disorientated.

It won votes at party conferences on the nationalisation of all the banks and even acceptance that the working class would have to discuss a general strike in the event of an imperialist war.

But the lack of a mass upsurge in class struggle gave Labour’s leadership time to recover.

It began to roll back the policy gains that the Socialist League had won. The League was crushed at the 1934 party conference and began to lose its influence.

The Labour leadership then moved to ensure that the party did not back any of the struggles that were beginning to break out outside parliament.

These included the fight against Oswald Mosley’s British Union of Fascists (BUF) and a solidarity movement with the Republicans in the Spanish Civil War.

The Communist Party led many of these movements, often supported by the Independent Labour Party and individual Labour Party members.

Mass action on the ground by ordinary people was key to stopping the rise of the BUF, culminating in the magnificent

anti-fascist demonstration at the Battle of Cable Street in east London in 1936.

But Labour’s leaders denounced it. They did not want the struggle to break beyond the bounds set by parliament.

The desire for unity against the fascist threat led to the creation of the Unity Campaign, which saw mass meetings and demonstrations around the country.

The Labour Party banned its members from joining it.

Cripps was forced out of the party in 1939. Other left wingers, including Nye Bevan, were also expelled.

The outbreak of the Second World War saw the Communist Party’s acceptance of the Hitler-Stalin pact.

The war saw the return of the left rebels to the Labour Party’s fold, and a joint government of the Tories and Labour, as the politics of “national unity” took hold, closing down the space for debate about the war and capitalism.

But the great sacrifices that working people made during the war led to great hopes for a different kind of world.